Your children are getting older and you need more space. The commute to the office is getting unbearable. Congratulations…you just got the promotion you have earned through years of hard work. Now it’s time to buy that new home that you have been dreaming about. What should I do next to turn this dream into a reality?
Many people jump in their cars or start searching the internet to look for that new home. STOP! Here are three important steps that will help you avoid wasted time and potentially give you an advantage throughout the buying process.
- How is your credit?
Your ability to qualify for a mortgage will primarily be based on your income and your credit standing. We all think we pretty much know what is on our credit report and our FICO scores. Surprise! That’s not always the case. Many credit reports have inaccuracies that will hurt your chances to qualify for a loan so they need to be disputed ASAP. Unfortunately, it often takes a long time to get credit bureaus to correct errors on your reports. Also, know your FICO score before you make that call to a apply for a mortgage as this will be one of the first questions you will be asked.
I’m not talking about your future mortgage payment yet. That comes later and will be a dollar amount you will back into after you have written down your income and determined your current and future bills. I mean everything! Car payment, student loans, credit cards, gym membership, groceries, dry cleaning, children’s education savings, etc…. Now don’t forget about yourself. Are you setting aside enough for your savings including retirement? How about that emergency fund for the unknown that may unfortunately happen including a hospital visit or an unexpected repair at your new home? Now you are ready to establish how much of your take home pay, not pre-taxed wages, you can afford for your payments toward that dream home of yours. Don’t forget the cost of maintenance, upkeep, and home improvements that come with moving to a larger home.
- Call a Realtor or Mortgage Banker First?
We are all excited so we want to ride around and look at houses. Dream about that fenced backyard and decorating your new home (yes…you need to budget for that too). Unless you are paying cash for that house, you will need a mortgage so CALL A MORTGAGE BANKER FIRST! Get pre-approved. I don’t mean pre-qualify. I mean a full pre-approval. The Mortgage Banker will ask for check stubs, bank statements, tax returns, and check your credit. Remember, they are loaning you money to buy that home so they are entitled to determine their risk. Don’t take it personally. Your ability to pay and your credit history is what they use to calculate how much risk they are willing to take on. Now you will know how much you can borrow and your future mortgage payment. Additionally, you will have a lot more power during the negotiation process with a seller because you have proven that you are a legitimate buyer with the ability to purchase their home. A seller will take you more seriously and your future realtor will use that fact to your advantage.
Now you are ready to contact that realtor and start your search for your future home.
Written By: Kim Ordoño, USA Mortgage
Kim Ordoño | Branch Manager | USA Mortgage, A Division Of DAS Acquisition Company, Llc
327 Dahlonega St | Suite 903b | Cumming, GA 30040
Direct: 770.557.8979 | Office: 770.916.1234 | Fax: 888.606.2429
Apply On-Line: Kordono.Usa-Mortgage.Com
NMLS: 167757 GA 28264 FL L022992 CO 100028660
KS0025587 TN 108333 TX 167757
Company NMLS: 227262 Missouri Residential Mortgage Licensee GRMA:33479
Kestra Investment Services, LLC (Kestra IS), Kestra Advisory Services, LLC (Kestra AS) and oXYGen Financial are not affiliated with USA Mortgage or DAS Acquisition Company, LLC. Kim is a guest writer and does not provide services through and is not affiliated in any way with Kestra IS, Kestra AS, or oXYGen Financial. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS, Kestra AS, or oXYGen Financial. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation